The capital market and banks are the backbones of the financial system of the country. It nurtures businesses, provides employment, and acts as a catalyst to the economic development of the country. An economy thrives when investments are made in several different sectors and companies, but it is important to ensure that these investments will be safe so that more investments can be made in future.
The safety of investment can only be guaranteed, when the company possesses financial ability to pay its dues and shows promise of growth in the future through its current activities. Credit rating agencies emerged to analyze the financial health of banks and organizations and provide detailed reports.
CRISIL pioneered the credit rating industry in India during the year 1987. It emerged as a trustworthy barometer of the financial condition of organizations and acted as a guiding light for investors and the government.
The parent company of CRISIL is Standard and Poor, one of the biggest global credit rating agencies at a global level. CRISIL provides assistance to investors, market intermediaries, banks, NBFCs, financial institutions, mutual funds, as well as state governments by providing accurate analytical data.
CRISIL Rating Scale
AAA, AA, A – This criterion of rating indicates that the company is financially strong and any investment made in the company will provide stable returns.
BBB, BB – While this rating is not bad, it indicates that the creditworthiness of the company in the question is average. While investment in such companies with providing returns, there might be a higher risk level to deal with.
B, C, D – If the company is rated in this criterion, it indicates a lack of stability and low probability of returns.
Impact of CRISIL Rating on Investment
It allows investors to take a calculated risk: By analyzing the complete financial background and health on a long-term basis while taking the current market factors into account, the credit rating can accurately depict the level of risk which can be expected from the investment.
Ensures Higher Returns: By providing information regarding different types of investments such as equity capital, insurance, and fixed deposits, credit ratings guide professional investors as well as regular people towards smarter investment practices.
Helps make sound choices: Depending on the risk that you are prepared to take, you can check the credit rating of the investment you are interested in. If the investment is holding a high credit rating, it engages investors to make more investments, thereby creating high economic potential in the market.
Why are Credit Ratings Important?
Credit ratings hold different levels of importance for different parties. For issuers, credit ratings provide independent verification without any controlled oversight. For regulators, ratings serve as a crucial tool for making policy changes.
For companies, it provides clarity if they are planning a merger with a specific company. By being a neutral party in the economic system, credit rating agencies such as CRISIL enhances access to investments in India and instils good faith in the economic system.
How You Can Use CRISIL Ratings?
Whether you are a seasoned investor or someone willing to grow your wealth, CRISIL ratings can be a trustworthy guide to you. If you are planning to invest in a fixed deposit scheme, you can check the CRISIL rating of the issuing company and make an informed decision to invest wisely. Bajaj Finance is known to be one of the fastest growing financial providers of India.
The company is accredited with FAAA from CRISIL and MAAA from ICRA which is the highest rating given to financial companies. When choosing your NBFC, you must look for a company that is at least accredited with an AA credit rating. Any rating less than that will increase the risks of losing your invested money. Following are some of the perks of staying invested in FD with Bajaj Finance:
- Guaranteed returns
- Quick accessibility through 200+ branches of the company spread across the country
- Online FD account management provided with the online portal named Experia
- Option to open multiple FD with varying tenors at the same time
- 24/7 customer support provided by the company
- No influence on the FD returns from the fluctuating market rates